All Forum Posts by: Abhijit Dey

We issue them with our property management company as payer. I don't think we PMs have authority to issue 1099 on behalf of someone else.

Actually, consider this: We have a few clients (very small minority) that operate as following. We get paid fees in a fixed amount per month for their properties. We also collect rent checks made payable directly to the owners, and deposit the checks in their account. They also write sizable checks to us, which we keep in escrow. As vendors need to be paid, we pay them out of that escrow.

So the net result is, we never write these owners a check. Ever. The rents collected never touch our books, and we never issue them a 1099. We don't even have a W9 for them. How would I ever issue a 1099 to vendors in their name? We don't even have their social sec (actually in this case the EIN # of their LLC). Okay, unofficially we do, because we also set up their LLC and got them their EIN #. But hopefully you get the point I am trying to get across.

I am a PM. Incorporated in IL. Being incorporated, none of my clients send me a 1099. But I have told them that they can, if they wish, for whatever reason. But why would they? In the course of the year, I pay them. No the other way around. So I send the 1099.

However, in a situation where you have made the payments to the PM, the PM is your general contractor vendor, and you should issue 1099 if appropriate. I would expect the repair payments to be included in the 1099. That entire 1099 would go in PM's income column, and what PM paid out to the vendor would go in PM's expense column.

Since most everything we create or receive via email, there is always that in email. Then, I have a folder hierarchy for ease of finding stuff, in a file server. It backs itself up in a separate HDD every 24 hours. Plus, a separate process backs up the file to a online cloud provider. I am covered even if the office burns down.

We do keep papers. We have a stack of papers on a rack. When the stack is high enough that it is touching the top of the rack, we throw away the bottom half 8D

We keep only leases & HUDs in that stack. We call the stack graveyard

But is it so (in court)? We are a brokerage firm as well in Illinois in addition to Property Management. From the negotiation stage to final contract, we are all either eSigning or just scanning signed paperwork and mailing them between the parties. In the end, everyone ends up with a bunch of pdf documents, with a random mix of some signatures digitally pressed in the pdfs, some signed & scanned, some signed & faxed. If those are good enough, why are scanned leases not good enough?

For credit check applications, I just don't see how an applicant can dispute they submitted an application for credit check when we have dozens of email communications with them concerning their applications. We keep emails forever.

Do you keep paper copies of credit check applications? I used to digitize it and throw away the paperwork, but have started storing the actual papers. Is it really necessary to keep the paper originals? For how long? My digital copies have bulletproof backups.

How about leases? Scan it and throw it away? Not sure if the printed copy would hold up in court in case of disputes. Opinions?

Hi @Jim Kennedy, I appreciate your perspective. And I am no way arguing fraud isn't present. All I am saying is moving a major filing deadline by 2 months is tough. If less than 1% of S corp (which I am) gets audited each year, this basically means the other 99+% of people are inconvenienced so the screws on the <1% can be tightened some more. I am just swamped right now and this additional work isn't helping I guess, that is all.

I would like to know if there are any ways to move the property to an LLC if there is a mortgage. I have moved 20+ property from personal name to LLC between a couple of investors. But I have always been lucky that they were held free & clear in the beginning.

We advise investors to buy properties in the 120k or lower range for the Chicago suburbs in areas we identify. Many of the bidding goes much better for cash offer. They buy → We manage & set up LLC & move property to LLC → owner refinances → rinse & repeat

And ostensibly the reason for the change was to combat fraud. Well, I guess it is easy for the IRS rulemakers to bump a longstanding 03/31 electronic filing deadline to 01/31 for the entire nation. I am sure there was absolutely no need to give businesses time till 03/31 all these years. Also sure the guys that changed the rule have exactly ZERO 1099 to send out themselves

Thank you @Dawn Brenengen. My clients are not going to be happy as this runs counter to usual thinking that they get a net amount. But I am starting to see why IRS might want it this way. If we have have paid for plumbers to fix a toilet and someone to switch out the HVAC, if I give clients a net amount they will be inclined to treat both expenses as the same, but they are not. The first one gets expensed and the second one gets depreciated, and the gross amount lets IRS track it.

I just didn't prepare for it that way, and I am in the middle of doing just that. Thanks again!

Okay, but how are you as a Property Manager doing it this year?